Credit Suisse analyst Erin Wilson Wright maintained at Outperform, price target lowered from $18 to $17.
SmileDirectClub’s full-year 2019 EBITDA guidance of a loss of $73 million to $80 million implies weaker-than-expected performance in the fourth quarter, Wilson Wright said in a Wednesday note.
Investors can now expect “more subdued” performance in the fourth quarter due to heightened legal spending and the delayed opening of its Texas facility, the analyst said.
Despite shares of SmileDirect falling more than 50% since its September initial public offering, Tuesday’s third-quarter report is “not enough” to help the stock, she said.
Yet the company’s reiteration of its longer-term EBITDA margin guidance of 25% to 30% is an “encouraging dynamic,” Wilson Wright said.
Finally, SmileDirectClub’s stock is trading at 3.3 times 2020 estimated EV/sales, which is “well below” its competitor Align Technology, Inc. ALGN 0.25% at 6.8 times, according to Credit Suisse.